Three of the biggest banks in the US have now banned their customers from using credit cards to make cryptocurrency related transactions. These are the JP Morgan Chase and the Bank of America as well as the Citigroup. This ban came over the past weekend as all three banks issued their statement over Friday and Saturday.
The first bank to declare a ban on cryptocurrency trading using Credit Cards was the Bank of America which announced this on Friday. The bank stated that this policy applies to all Credit Cards - personal or business. However, Bank of America has specifically stated that this does not affect Debit Cards and customers can still make use of them to make transactions with cryptocurrency exchanges.
Following the announcement from Bank of America, Citigroup too, issued a similar statement on Friday evening. The popular banking group stated that they are halting the purchase of cryptocurrencies using their cards - but are open to reviewing their policy ‘as the market evolves’, a company spokesperson said.
On Saturday, JP Morgan Chase too, joined these banks as they stated that they are halting the purchase of cryptocurrencies using their Credit Cards. A representative for JP Morgan Chase stated that they don’t want to take the credit risk that is often associated with cryptocurrency trade.
Allowing the purchase of cryptocurrencies via Credit Card can be quite a headache for those who are providing the money. In markets which are as volatile as cryptocurrencies, borrowers often tend to borrow large amounts of money in hopes of getting big returns. However, when markets crash, their investments start to fall in price and they suffer huge losses, sometimes even being unable to repay the bills.
Moreover, considering how common credit card theft is - those who have stolen credit card information of users can easily make cryptocurrency transactions on their name. This is another rising concern among the banks. Over the past few weeks there have been a number of regulations which are being imposed upon cryptocurrencies. While today this decision from the banks has been announced, last week Facebook introduced a new advertising policy banning all ads about cryptocurrencies and ICOs.
Bitcoin, the apex cryptocurrency has been falling down the charts over the past few weeks. The cryptocurrency’s price had fallen down to a two-month low of $7800 but has since recovered to $8800 as of this writing. With this ban on Credit Card transactions being enforced by the top American banks, it might make it even harder for those looking forward to buy Bitcoins to invest into the markets.
In the past, a large majority of cryptocurrency exchanges were not accepting Credit Cards. This has been a trend which started to pick up over the past couple of years. However, with the top American banks announcing this, it is bound to have an impact on the trade volume of some exchanges as well. Stay tuned with us for more updates on the world of cryptocurrency!